FairTax Overview
THE FAIRTAX PREBATE
The Prebate is designed to ensure that no American pays federal taxes on spending up to the poverty level. All
valid Social Security cardholders who are legal U.S. residents receive a monthly Prebate payment equivalent to
the FairTax paid on essential goods and services, as measured by the Dept. of Health and Human Services
poverty level expenditures. This is a well-accepted, long-used poverty level calculation that includes food,
clothing, shelter, transportation, medical care, and so on. The amount of the Prebate payment is computed by
multiplying the poverty level expenditures by the FairTax rate according to the following schedule. For a two
adult, two child household the annual prebate amount is $7,135 and $595 per month.
2013 FairTax Prebate Schedule1
One-adult household
Family Size
1 person
and 1 child
and 2 children
and 3 children
and 4 children
and 5 children
and 6 children
and 7 children
Two-adult household
Annual
Consumption
Allowance
Family
Size
$11,490
$15,510
$19,530
$23,550
$27,570
$31,590
$35,610
$39,630
$2,643
$3,567
$4,492
$5,417
$6,341
$7,266
$8,190
$9,115
Annual
Consumpt
ion
Allowance
$220
$297
$374
$451
$528
$605
$683
$760
Family Size
couple
and 1 child
and 2 children
and 3 children
and 4 children
and 5 children
and 6 children
and 7 children
1
Annual
Consumption
Allowance1
Annual
Prebate
Amount
Monthly
Prebate
Amount
$22,980
$27,000
$31,020
$35,040
$39,060
$43,080
$47,100
$51,120
$5,285
$6,210
$7,135
$8,059
$8,984
$9,908
$10,833
$11,758
$440
$518
$595
$672
$749
$826
$903
$980
For Families/households with more than 8 persons, add $4,020 to the annual consumption allowance for each additional
person. The annual consumption allowance is based on the DHHS 2013 HHS Poverty Guidelines as published in the Federal
Register, January 24, 2013. The annual prebate equals 23% of the annual consumption allowance.
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